After many years of talking about it, the patent cliff is
finally with us in a big way. Starting
with Pfizer's Lipitor this coming November, Big Pharma is projected to lose
more than $60 billion in the next five to six years from drugs that will lose
patent protection to generics.

Naturally, the industry hasn't been standing still. Mergers
and acquisitions and buyouts have been one "quick-fix" way to bolster
companies' drying pipelines. Carpet-bombing patent practices have been another
way to enrich one's intellectual property (IP) estate. Recently, many Big Pharma
companies are officially entering the generics market, which only a few years
ago they were happy to leave to competition.

However, all of these temporary "pain relievers" do not
create real shareholder value and do not address the root cause of these woes,
which is none other than our innovation deficit. In other words, despite
increasing dollar spending on R&D, we are not discovering enough new, safe
and efficacious new chemical entities (NCEs), nor is our understanding of
biology, disease and drug mechanisms-of-action (MoAs) improving fast enough and
in a way that creates a fertile knowledge foundation for the development of
these NCEs. To say there has been no progress at all would be an overstatement,
but the process is slow, and one cannot help but feel this process is not as
efficient as it should be.

At the heart of the present pharma industry predicament is a
knowledge-generation and management problem. This is no revelation to anyone
involved in the industry, so what are the options?

One recent trend has been to "recycle" existing knowledge
and IP. The thinking is simple and goes something like this: "If we can't
generate enough new knowledge, maybe we should re-examine what we already know
to see if there are any hidden gems already in one's possession."

This is exactly what drug repositioning (DR, also known as
drug reprofiling and drug repurposing) is all about. It assumes that many
existing pharmacological compounds, having made it to market or not, may show
efficacy in more than one therapeutic area (TA)—and as a minimum in at least
one additional TA than that for which it was originally developed. Companies
then proceed to look for these alternate indications.

Drug repositioning is not new, and there are many examples
of successfully repositioned drugs from the past. Thalidomide is a good example
of a repurposed drug. In 1964, Jacob Sheskin at the University Hospital of
Marseilles was trying to treat insomnia in a patient suffering from erythema
nodosum leprosum (ENL) when he ran out of options. In a last-ditch attempt, he
used thalidomide, which he believed might be effective as a sedative. Not only
did thalidomide allow the patient to sleep, but simultaneously healed his sores.
This effect was corroborated in follow-up clinical trials, which established
thalidomide as a primary treatment for ENL. Finasteride (Proscar) is another
interesting example. Originally approved for the treatment of benign prostate
hyperplasia, it was subsequently found to be effective against male-pattern
baldness.

Impressive though they are, most of these examples have been
predominantly serendipitous affairs. What is now needed for the industry is for
this to occur on a systematic basis. If drug repositioning could occur on a
systematic basis, this would be seen as a reliable tool that can be used
multiple times to support management in go/no-go decisions on company assets or
even entire disease programs.

Pfizer seems to already be down this path. In March 2008,
the company declared that approximately 50 to 60 percent of its assets that
would advance from Phase II to Phase III clinical trials were, in fact,
repositioned drugs.

There are also very good scientific reasons why drug
repositioning is valuable, with recent research showing how an existing drug
(such as Gleevec, ibuprofen, certain antidepressants and others) can have an
impact on more than one disease that share certain characteristics at the
mechanistic level. Pharmaceutical companies are taking increasing notice of
this, as reusing an existing drug with proven safety to start a new clinical
development program is much cheaper and less risky than creating an entirely
new drug. This strategy makes sense within the context of portfolio
development, being relevant not only for the drugs that are slated to be
developed internally, but also for the ones that are on the shelf and are being
explored for out-licensing.

Like many processes, drug repositioning can be practiced in
a variety of ways. For example, one can develop mathematical models of diseases
and/or biological systems and use these to simulate the effect of selected
drugs in that disease. Alternatively, one can select a set of animal models
that are deemed predictive enough of disease progression in humans and use
those to assess the potential of any asset (drug or compound) of interest as a
repositioning candidate.

Another way is to use existing scientific literature and
other resources, once again to identify repositioning opportunities, based on
the broad understanding of what is known about the drug or the disease of
interest. Done properly, this last approach has a distinct advantage as it
minimizes assumptions, which in a discovery context can be the mother of all missed
opportunities. It can also support "bidirectional repositioning," meaning that
one can use this method to identify new TAs for an existing drug of interest,
as well as identify the most appropriate drug (or drug combination) for any TA
of interest.

Literature-driven repositioning, moreover, has the potential
for a much broader impact on the industry since its techniques, possibly
combined with other tools such as cheminformatics and molecular binding
simulations, could be used to render de-novo
discovery as a systematic process. This would be the final of a three-stage
evolutionary process, the first stages of which we are already beginning to
witness.

In the first stage, repositioning is no longer a
serendipitous event, but becomes more of a systematic process, increasingly
used by pharma companies to fill their pipelines and ensure the appropriate
exploitation of existing IP. In the second stage, examples of which are already
taking place, repositioning is applied to compounds at their earlier
development phases. In other words, repositioning becomes part of a drug's life-cycle
management process. This will become very important as companies attempt to
protect themselves from what we call "competitor adjacency moves," which are
nothing more than the "usurping" of IP estate from less-than-vigilant IP
owners.

One ultimately expects that the opportunities for
repositioning using existing knowledge will have run their course, and the need
to discover novel chemistry and novel MoAs will resurface. At that point, some
of the tools and techniques developed for drug repositioning will be used for
NCE discovery, as well as for better understanding of biology itself.

Given these factors, repositioning will be useful to the
life sciences industry in three ways in the years to come: it will help develop
new/better therapies to address medical needs, it will help develop new
techniques to make discoveries on a systematic basis and finally, as a
consequence of the above, it will help make drug development more efficient.

We expect drug repositioning to increasingly impact
strategic decision-making. As the Enbrel story shows, one company's oversight
can be another company's opportunity.
Enbrel is the Amgen anti-TNF drug that was repositioned by Bioassets
Development Corporation (BDC) to Sciatica before its patent expiration. BDC was
subsequently bought by Cephalon, itself now in advanced buyout discussions with
Teva. What this incident tells us is that one can no longer feel safe and
remain complacent, even when it comes to assets still under patent protection. Strongly
supported method-of-use patents can be granted to competitors forcing the
original owner to either cede the specific area, or come to some arrangement
with the owner of the repositioned drug.

There are additional variations to this theme. For example,
as a result of past patent practices, there are a number of pharma companies
that, while owning the application of a certain compound to a number of disease
areas, in practice do not have "full possession" of their know-how, meaning they
are unsure for which of these areas to further develop their asset. Applying
repositioning analysis on these known disease areas could help prioritize them
for the drug owner.

It seems that drug repositioning is here to stay and will
have a definite role to play in the years to come. It has started with
repositioning of generics on a systematic basis and will soon rapidly evolve to
support life-cycle management decisions for drugs still under patent protection,
as well as product development in the OTC space.

We also expect drug repositioning type analyses to support
strategic IP management and protect composition-of-matter IP holders against
competitor "adjacency moves." In the longer term, literature-driven drug
repositioning could become one of the tools supporting de-novo discovery. These are extremely exciting prospects for
something that started out as a small collection of serendipitous events.

Persidis has a PhD. artificial intelligence. He has built technology
development teams at European corporations in the engineering, software and
telecommunications fields. He is also an expert reviewer and evaluator for the
European Commission and the Austrian government in the areas of IT and the life
sciences, serves on a number of expert advisor panels on knowledge technologies
and is a frequent presenter at international fora.